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A deal city retirees can’t refuse?

By Charles Sercombe

Attention Hamtramck retirees, the city has a deal waiting for you.

In an attempt to cut expenses and chip away at a projected $3.3 million deficit, the City of Hamtramck is offering its retirees a yearly $7,500 payment to opt out of a city-funded health insurance plan.

The city’s Financial Director, Nevrus Nazarko, says the plan would appeal to those who can receive health insurance coverage from another employer or their spouse.

A likely candidate would be an ex-elected official. In previous years the city offered lifetime health insurance coverage to elected officials who served at least 10 years.

The $7,500 payout will be offered to a family of two. For those who are single, $4,000 will be offered.

Nazarko said the city could save upwards of $450,000 a year if at least 50 retirees accept the offer. He said the rising cost of health insurance has been a “huge liability” for the city.

In the past year, health insurance cost has increased by over 20 percent.

The city has about 150 retirees. The future cost of providing health insurance looks grim, Nazarko said. He said the city’s health insurance liability over the next 30 years will cost $70 million – an amount he said the city will not have.

Nazarko said if the city fails to meet its obligation, he expects retirees to go to force a court-ordered property tax increase to cover the insurance cost.

Hamtramck is not alone in facing a variety of financial challenges. Many cities are turning to contracting out services, such as police and fire protection, in order to avoid retirement obligations.